Human resource departments can have a dramatic impact on strategic planning, productivity, administrative cohesion, employee engagement, and various other aspects of running a business.

Indeed, a strong HR department can help your business establish a productive and profitable company culture.

So the question is:

What makes an effective HR department?

Recognizing that HR can be a strategic function is the first step in being able to build the most effective HR department. This has to be recognized and supported by senior leadership. Start by defining the role of your HR function. Look at how they will manage their responsibilities, some of which include:

  •  Identifying, Attracting and Retaining Talent
  •  Building and Reinforcing Company Culture
  •  Employee Training
  •  Company Assessments
  •  Benefits and Compensation
  •  Organizational Analysis

The HR department must build a relationship of trust. Employees and leadership need to know that they can trust the HR department to work in the collective best interest of the company and employee. This requires a partnership between the business leaders, employees and the HR department. This partnership must be based on mutual respect between these parties, all of which need to be working toward the common goals of the company.

Recruiting the Right Employees

A human resource department doesn’t just keep an eye on your current staff; they also help attract the best talent to ensure your company’s success. With the changes in demographics facing the United States, employers are facing a war for talent. Unemployment is reaching historic lows and the skills of the workforce do not always match the needs of the employer. The HR department needs to develop a holistic, creative approach to identifying and attracting talent. Attracting, developing and retaining talent will be a hallmark of the most successful companies in this era of the war for talent.

Building and maintaining company culture is an important mission for every HR department, so it’s important to find people who are the right fit. The company culture can be a valuable tool when recruiting talent. Building that culture is not easy and is never complete.

So who is the right fit?

Obviously finding people with the right skills is foundational. However, finding employees who share similar values and will align with the company’s culture is equally (and some say more) important.

Once new staff members are identified, they need to be “onboarded.” This process will provide new team members with a clear sense of the goals, history, and the culture of the business. This, in turn, can increase productivity and ensure that their efforts are properly aligned.

Business Impact of Human Resources

For many companies, the “secret sauce” is the company culture. A unique culture can create a strong drive and help keep employees on track and mission focused. This can increase productivity, which in turn can boost revenues and profits. Culture also acts as a guidepost for employees when faced with critical business decisions. The HR department is one of the key builders of the company culture.

Regardless of an organization’s size or industry, human resource management plays a vital role in impacting business direction, strategies, and objectives. Ultimately, a successful HR team can help improve an organization’s overarching performance, enhancing their company culture, and positioning them at the forefront of a competitive market environment.

While many perceive HR functions as primarily focused on employee recruitment, business leaders who engage HR as a strategic partner are able to integrate the department’s initiatives with “big-picture” company objectives. The activities of Human Resources, in strategizing how to attract, select, develop and reward personnel, can benefit company performance tremendously. This is why it is imperative that HR truly understand the company culture and strategic objectives. With this vision, the HR function can help company leaders put in place processes to develop the right skills, culture, performance appraisal systems and performance objectives to drive the business toward its strategic objectives.

Traditionally, HR recruitment and selection processes aimed to identify talent through a “best fit candidate for the job” approach. Today, however, a strategic HR department will focus on hiring candidates for positions that will accelerate the growth and direction of business, not singularly their contributions to an internal role. By evaluating employees for more than their skill-set, and implementing training and development programs, HR can align the core values of both the employee and company, and establish a common goal across individuals, various departments, and business leaders.

By definition, training and development refers to the process of obtaining or transferring knowledge, skills and abilities needed to carry out a specific activity or task. HR can help refine and grow employee talent, and ultimately drive the value and potential of a company. By aligning talent development with company goals the HR department can help provide a key element to company success.

Further, HR secession planning, the holistic strategy behind employee recruitment, development, and preparation for advancement, benefits business leaders and employees alike. From teaching team-building skills to sales staff, or helping C-Level executives cultivate their leadership skills —the HR process ensures that employees are continually developed and capable of filling dynamic roles, ultimately maintaining the talent pipeline and mitigating the risk of employee turnover.

Equip Your HR Department

Because the Human Resource Management landscape is complex and multifaceted, it is vital for business leaders to not only equip their HR department with tools for performance evaluation and employee development, but provide them with internal support and communication outlets as well.

Because HR departments typically control a mass aggregation of data concerning employee and business operations, having multiple systems can cause a huge headache and be detrimental to their functional efficiency. Therefore, companies must collaborate with HR to integrate best-fit analysis systems that will capture, manage and report business/employee activities in an organized, single-system process. To improve employee performance, retention rates, and business functions, HR departments should work with business leaders to measure KPIs in alignment with the overarching company expectations and goals.

Reviews and reward systems should also be continuously tested and refined, a task not singular to the HR department. By revisiting old feedback processes and reward systems, and collaborating with HR about what employee/operational assessments require the most attention, business leaders can help their HR department optimize company culture and incentivize employee performance in alignment with a common goal. Additionally, use the insights from your employees to figure out what benefit package will encourage the most engagement. A good work/life balance will go a long way in the eyes of your staff.

Outsourcing HR Functions and Specialties

As you can see, a lot goes into building a strong human resources capability. However, your company doesn’t have to take on the entire challenge by itself. Often, outside contractors, experts, and others can be brought in to provide assistance. This can range from expertise around a specific topic to help assessing your complete HR function.

By finding the right partners, it is possible to bring great expertise without having to invest in the full-time staff, which in turn can produce bottom-line payoffs. Often the most effective and efficient structure is a combination of some internal team coupled with a trusted partner.

HR is Serious Business

A strong human resources capability is crucial in today’s hyper competitive market for talent. At the end of the day, your human resources staff will be responsible for helping build your company culture and attracting retaining and developing your talent. Ultimately, your business is as good as the people you have running it day in and day out.

Of course, accomplishing all of the above is easier said than done. Fortunately, Lauber Business Partners has helped numerous companies build effective and efficient HR functions.

Click here to find out more about how Lauber Business Partners can help you